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All About Business  

Isabella Guzman takes charge at SBA

By Ana Radelat

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Growing up, Isabella Casillas Guzman would staff the front desk at her father’s veterinary clinic, a job that gave her an appreciation for small businesses that would eventually propel her to become their biggest advocate.

“The family business gave me my core foundation and my love for entrepreneurship,” Guzman said.  “I learned early on how important every customer was who walked through that door.”
The fifth Latina ever to serve in a presidential Cabinet, Guzman is Administrator of the Small Business Administration (SBA). With her background, which straddles the worlds of business  and government and includes an undergraduate degree from the University of Pennsylvania’s Wharton School of Business, it seems inevitable that she would lead a federal agency that has recently grown in importance and size.

But Guzman is the furthest thing from the stereotypical bureaucrat, bringing passion and hands-on experience to the job. Sworn into office in March 2021 after a bipartisan confirmation vote in the Senate, Guzman inherited a portfolio of nearly $1 trillion in emergency aid for small businesses devastated by the pandemic. Included in that portfolio was the troubled Paycheck Protection Program, which gave qualifying businesses forgivable loans if they kept their workers on the payroll, and was criticized for a lack of oversight that led to fraud and abuse.

Guzman was also tasked with oversight of the Restaurant Revitalization Fund and other grant programs aimed at shoring up small businesses during the pandemic. More recently, SBA has established a new program aimed at helping small and disadvantaged businesses improve their access to capital and resources so they can compete for contracts generated by the $1.2 trillion infrastructure bill.

In addition, Guzman leads SBA’s efforts to provide emergency loans in the wake of natural disasters. That was a key job this year with major hurricanes slamming into Puerto Rico and Florida.

While she’s had to grapple with the lingering problems of PPP as well as criticism by those who say the disbursement of some pandemic funds is too slow, Guzman has stayed largely out of the limelight and drawn little fire from President Biden’s foes. Yet she is dedicated to the president’s agenda. Among other duties, Guzman is in charge of pushing to reach a goal Biden set on his first day in office and ensure that small and disadvantaged businesses, including those owned by Latinos, procure at least 15 % of the federal government’s contracts by 2025.

Guzman said SBA is “working diligently” with all the federal agencies to reach this goal. She’s optimistic because the federal government in 2021 awarded 11 percent of its contracts to small and disadvantaged businesses, “a year ahead of time,” Guzman said. “So we are well on our way.” 

Latino businesses have always struggled to win lucrative federal contracts, even as Latino-owned small businesses have grown 34% and contributed $500 billion to the US economy over the past 10 years. In contrast, non-Latino small businesses have grown by only about 1% percent in that time period.

Established by President Dwight Eisenhower in 1953, SBA was created to help small businesses receive credit at affordable interest rates as well as protect banks and other lenders from losses when failed enterprises could not pay back loans. It was elevated to Cabinet status by President Clinton. SBA had traditionally been a low-profile agency with a limited budget, but the pandemic changed everything. “The agency has scaled so dramatically,” Guzman said. 

Although she was born in Burbank, CA, Guzman’s father was a seventh generation Tejano and her mother was born in Mexico. Like many Latinos, Guzman has a very diverse background, which she learned of from family lore and verified through genetic testing.

“There’s a rich history,” Guzman said of her family. “I’m of Mexican descent, but in addition my father is a quarter Chinese and my mother is a quarter German. So there is such great diversity in my family that I’m very proud of.”

Guzman said the diversity of many Americans, especially those in the Latino community, can be leveraged to reach overseas markets overseas and grow the U.S. economy. “The majority of the world’s customers are outside the United States,” she said.

Guzman also leads a very diverse SBA, where many top officials and appointees are Latino or other people of color. “I think it is important that SBA leadership – and leadership across government – looks like the communities we are serving,” said Guzman. “Connection is critical, and if we want to build better bridges to our entrepreneurs then we must center equity in everything we do, including in our hiring.”

Guzman said she opened her first business, a framing shop in Los Angeles, in her mid-20s with a partner and funds raised from friends and family members. She called it a “bootstrap” operation. “Having to setting up the business, get local permits, finding and developing vendor relationships, marketing and accounting, having to start the business from scratch is a unique challenge to someone who jumps into that space,” she said.

The next business Guzman was involved in was a print studio rental firm. She said it was not much of a leap from the framing shop because both businesses were “broadly” in the arts and entertainment realm and both faced the same challenges common to all small businesses -- including the development of a strong workforce and raising capital to grow. 

Guzman eventually crossed over to the world of politics and government and was hired by former California Governor Gray Davis. He said Guzman is a great advocate for small businesses because she has first-hand knowledge of the challenges faced by entrepreneurs---starting with those faced by her father.

“Her father practiced veterinary medicine and she followed him around,” Davis said. “The most effective people in public service are people who have spent time in the community they will serve.”

Guzman said working for her father---who practiced medicine while also having to do the bookkeeping, hiring and perform other tasks, taking a briefcase of work home at night---taught her that an entrepreneur “has to wear many hats.”

While her father, who eventually opened several veterinary clinics in California, gave her business sense, Guzman said her desire to work in government and involvement in an organization that helps Latinas was inspired by her mother.

“Mom always inspired in me a sense of advocacy,” she said. “I think all of us from underdog communities have a sense of need to advocate on behalf of those communities, to help uplift them.”

Guzman is close to another powerhouse Latina, Maria Contreras-Sweet. Thirty-three years ago, Contreras-Sweet founded Hispanas Organized for Political Equity (HOPE), a nonprofit that helps Latinas in all walks of life achieve success. Guzman joined the board of the organization and will receive the organization’s “Spirit of Hope” award this year. 

“She fits the profile of our awardee,” said Helen Torres, the group’s executive director and CEO. “And that’s a Latina devoted to public service who opens doors for others.”

Torres also said Guzman “always followed her passion and that was, from an early start, business development. …She loves creating small businesses because that’s where innovation is.” 

Contreras-Sweet also worked for the former governor as head of the California Business, Transportation and Housing Agency, and would become SBA Administrator in the Obama administration. Guzman took a job in that administration as Deputy Chief of Staff at the SBA.

After President Trump won the White House, Guzman returned to California, becoming the state’s Small Business Advocate.  Four years later, she was tapped by President Biden to head SBA.  She said she accepted the job offer because “I really love SBA.”

Somehow, during her bicoastal life she found time to marry her husband, Javier, and bear two children, now teenage boys. But Guzman seems to be anchored in Washington D.C., at least for a while.

“There’s a lot of work to be done to make sure we can achieve equity in the entrepreneurship, and I’m committed to making sure the SBA can deliver,” she said.

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